As joining a warehouse club gets more expensive, would-be members may need to look a little further than multi-packs of frozen pizza and bulk packs of paper towels to decide if the annual fee is worth it.
Costco announced last week that it will raise prices by 10% on Nov. 1, a move that increases the basic membership to $55 from $50 and the executive membership -- which comes with a 2% rebate on all purchases -- to $110 from $100. In January, BJ's Wholesale Club increased its fee to $50 from $45, which a spokeswoman says was done to maintain low store prices and other membership benefits. (Costco did not respond to requests for comment.) Sam's Club is the lone holdout: a spokeswoman says there are no plans to change its long-time $40 fee.
The changes are minor for business customers, but are enough to make consumers reassess, says Howard Jackson, the founder of HSA Consulting Inc. in Knoxville, Tenn. "Clearly you have to look at the overall investment: how often you're going to shop, and what you'll spend," he says.
Savings on groceries along may not be the answer. Industry tracker Warehouse Club Focus estimates that club prices are 25% to 50% cheaper than at other retailers, but coupon clippers say they can beat those discounts by matching manufacturer's coupons and supermarket sales. "I consistently slaughter the prices at warehouse clubs," says Jill Cataldo, the founder of Super-Couponing workshops.
But there are other, less-advertised membership perks that could still make joining worthwhile. Here are six for shoppers still on the fence:
Warehouse clubs tend to price their fuel at a loss to get shoppers in the store, so members who live close to their club can save a bundle on gas, says Jackson. In most cases, non-members can't buy at all, he says, so a member who isn't filling his tank is losing out on substantial savings. At $3.30 per gallon, the Monroeville, Penn., Sam's Club is currently 13 cents below than its next-cheapest competitor, according to GasBuddy.com. At that spread, a driver would save almost $2 on a 15-gallon tank, or more than $100 on a year of weekly fill-ups.
Check warehouse club prices for your next tech upgrade. At Sam's Club, a 55" LG HDTV with 3D capability runs $1,397 -- $303 less than the same model at Best Buy. Return policies are more generous, too, if you change your mind or have any problems. Costco and Sam's Club both allow returns within 90 days, compared with 30 days at Amazon and Best Buy. Bring a smartphone for easy comparisons, though comparing can be tough if model numbers are store specific.
Bank partnerships allow members to get slightly better rates. Capital One offers Costco members preferential rates on its InterestPlus Online Savings Account, which yields 0.85% plus a quarterly 10% bonus on interest earned. The members-only 0.91% rate equates to an extra $7 in interest over a year on a one-time, $10,000 deposit. But that yield is only modestly competitive with other high-yield accounts: American Express Bank, to name one, offers 1% to all accountholders.
Club members may secure better rates on homeowners and auto insurance policies. BJ's offers a 10% discount through Liberty Mutual, while Costco promises savings of "up to $485.66" through Ameriprise. Such affiliate discount may also be available through an employer, alma mater or other group, says Scott Simmonds, a Saco, Maine-based insurance consultant. "The trick is to shop around first and make a decision based on value," he says.
Shoppers planning a trip to the amusement park or movies can often save 30% by buying ahead at the warehouse club. For example, Costco charges $82.99 for a 10-pack of AMC Theatres vouchers that don't expire and can be used for any showing. A New Yorker would spend $115 at the box office for those tickets. But less frequent adventurers might find better one-time offers on daily deal sites.
"I wouldn't join a club just for the car-buying service, but if you're a member already, you'd be foolish not to take advantage of it," says Phil Reed, consumer advice editor for Edmunds.com. Warehouse clubs often pre-negotiate prices with local dealerships, cutting as much as 10% off the sticker price. AAA members might get a similar deal, and seasoned negotiators might be able to do better, he says, but going the club route gets you an offer much faster.